Cisco up after deal to buy cloud-tech firm

SteveGelsi

NEW YORK (MarketWatch) -- Cisco Systems Inc.'s
CSCO, +0.42%
$1.2 billion acquisition of privately-held Meraki amounts to a pricey bet on cloud-based computing, analysts at Janney Capital Markets said on Monday. "The deal looks very expensive," analyst Bill Choi said in a note to clients. "Meraki represents Cisco's big bet on cloud-based network architecture." Cisco could leverage Meraki's cloud platform for wired switches, security, mobile devices, vending machines and other products, he said. He reiterated his neutral rating on Cisco and a price target of $20 a share. Shares of Cisco rose 0.9% in premarket trades. Cisco, the networking-equipment major whose shares are a component of the Dow Jones Industrial Average
DJIA, -0.32%
said it expects to close the deal by the end of January, which marks the close of its fiscal second quarter. Cisco announced the deal on Sunday.

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